I am new to BP and am looking to find creative ways to acquire properties to buy and hold. I had heard about owner financing and wanted some insight from the pros. What are the advantages and drawbacks of this? If this is a worthwhile means to acquire real estate than, what are some common terms that both parties agree to? ( i.e. payments, interest, length, down payment)
Thanks in advance!
Advantages to name a few 1)you can customize terms that are agreeable to both buyer & seller. 2) For the seller, more potential buyers outside the box of institutional lending guidelines.
Drawbacks: Either party may not draft, understand or execute terms properly etc. due to lack of experience & expertise. (Always wise to get professional legal advice)
There are no common terms, it's all negotiable
@Calvin Royster Advantages are pretty obvious with the biggest one being the ability to purchase a property without having financing.
Biggest drawback IMO is what @Ellis San Jose said about the contract. You really want to have a solid contract between you and the seller. Consult with an attorney on your contracts. Another big drawback could be your seller, are they a pain in the butt? Would it be better to not have to continue to deal with them?
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